National Minimum Wage Set to Increase by 20p to £6.70 an Hour

The rise is the largest real-terms increase for adults in seven years

The national minimum wage for adult workers is set to increase by 20p to £6.70 an hour from October, the government has announced in the biggest real-terms rise in seven years.

More than 1.4 million workers will find themselves better off with the changes as the hourly rate for younger workers and apprentices also increases.

The statutory minimum for 18-20-year-olds will increase by 3%, from £5.13 to £5.30, for 16 and 17-year-olds by 2% to £3.87, and for apprentices by 20% to £3.30 an hour.

The government has significantly upped the Low Pay Commission’s proposed 7p an hour increase for apprentices, instead opting for 57p an hour, which applies to apprentices aged 16 to 18 and those aged 19 or over in their first year. All other apprentices are entitled to the national minimum wage. It had earlier rejected business secretary Vince Cable’s suggestion for a £1 an hour increase in the rate.

After criticising the coalition for eroding the minimum wage, Labour has promised that it would rise to £8 an hour should the party win May’s election.

In his announcement, Cameron said: “At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out, that hard work is really rewarded, that the benefits of recovery are truly national.

“That’s what today’s announcement is all about, saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britain’s families and a better future for our country.”

Director of the Institute of Economic Affairs Mark Littlewood said: “The minimum wage was introduced to eliminate perceived exploitative pay at the bottom end of the jobs market, taking into account the prospect that minimum wages set too high would lead to fewer job opportunities. Today’s announcement flies in the face of that principle.”

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